Seventeen states increased their minimum wages in 2014. Most of the changes happened early in the year, starting with New York increasing its minimum wage from $7.25 to $ per hour on New Year’s Eve 2013.

New York’s increase was joined by new higher minimums on January 1, 2014 in Washington ($9.32), Oregon ($9.10), Vermont ($8.73), Connecticut ($8.70), New Jersey ($8.25), Rhode Island ($8.00), Colorado ($8.00), Ohio ($7.95), Ohio ($7.95), Florida ($7.93), Montana ($7.90), Arizona ($7.90), Missouri ($7.50).

Later in the year, Delaware ($7.75), Washington, D.C. ($9.50), California ($9.00), Minnesota ($8.00), and Michigan ($8.15) imposed higher minimum wages as well.

Higher minimum wage by States

Some states tied their minimum wages to inflation or limited the new higher minimums to certain size companies.

States that Imposed Higher Minimum Wages
StateIncrease DateNew Minimum WageIncrease AmountNote
New York12/31/13$8.00$0.75A
New Jersey01/01/14$8.25$1.00B
Rhode Island01/01/14$8.00$0.25
Washington, D.C.07/01/14$9.50$1.25
A Tied to inflation
B Tied to inflation after 2014
C For companies with annual revenue greater than $500,000

Higher minimum wage by Counties and Municipalities

States, of course, were not the only political entities to impose higher wages. Some municipalities and counties have also taken steps to force businesses to increase their labor costs. At last count, the counties and municipalities include SeaTac, Washington; San Francisco, California; Jackson Rancheria Indian Reservation, California; San Jose, California; Albuquerque, New Mexico; Bernalillo County, New Mexico; Santa Fe County, New Mexico; Montgomery County, Maryland; and Prince George’s County, Maryland.

Counties and Municipalities that Imposed Higher Minimum Wages
StateIncrease DateNew Minimum WageIncrease AmountNote
SeaTac, WA01/01/14$15.00$5.81C
San Francisco, CA01/01/14$10.74$0.19A
Jackson Rancheria Indian Reservation, CA01/01/14$10.60$2.60
San Jose, CA01/01/14$10.15$0.15A
Albuquerque, NM01/01/14$8.60$0.10A
Bernalillo County, NM01/01/14$8.50$0.50
Santa Fe County, NM04/28/14$10.66$3.16B
Washington, DC07/01/14$9.50$1.25B
Montgomery Co., MD10/01/14$8.40$1.15
Prince George’s Co., MD10/01/14$8.40$1.15
A Tied to inflation
B Pending approval
C Does not impact workers at SeaTac airport

It’s still quite early on evaluating how large the adverse employment effects will be, but it looks like the effects are starting to show up in the retail trade employment numbers. As a note on why retail trade, the effects would likely show up in retail trade before they show up in other industries because retail trade employs a large proportion of the minimum wage workers.

Here’s the early evidence.

The figure shows the growth in retail trade by state since the start of the calendar year according to whether or not a state imposed new higher minimum wage rates.

On the left hand side are states that left things as is, meaning these states did not impose any new minimum wage rates.

On the right had side are states that imposed new minimum wage rates.

The figure that matters here is the difference in the average employment growth rate. In states that left business as is, employment growth in the retail trade industry is up 0.72%.

Retail trade growth vs minimum wage

In contrast, states that imposed higher minimum wage rates saw retail trade employment growth of only 0.43%.

Although it’s still too early to say the results are statistically valid, one could likely assume further analysis will find that some or most of the difference is due to higher minimum wage rates.

Minimum wage retail trade

Overall, some economists have been praising the slowing growth in retail trade employment as a sign that the economy is recovering. What is likely forgotten in such a statement is that the slow growth in retail trade during 2014 is most likely due to new minimum wage regulations, not an improving economy.